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Acccb543 assessment 1

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DONOVAN ENTERPRISES: PLANNING FOR CAPITAL INVESTMENTS Tamara Chunn University of Phoenix ACCCB/543: Managerial Accounting and Legal Aspects of Business May 19, 2022 Mrs. Deborah Adkins Considerations Project A: Machine Cost:$400,00 Inflow: $126,000/Yr Desired Rate of Return: 8% Project B: Training Cost:$160,000 Inflow:$52,800/Yr Year Project A 0 1 PV factors@8% (400,000.00) 126000 1 (400,000.00) 0.925925926 116,666.67 2 126000 0.85733882 108,024.69 3 126000 0.7932241 100,022.86 4 126000 0.735029853 92,613.76 Net Present Value: Year 0 1 2 3 4 Project A -400000 126000 126000 126000 126000 Project A Present value PV factors@8% =1/((1+8%)^A2) =1/((1+8%)^A3) =1/((1+8%)^A4) =1/((1+8%)^A5) =1/((1+8%)^A6) Net Present Value: 17,327.98 Present value =B2*C2 =B3*C3 =B4*C4 =B5*C5 =B6*C6 SUM(D2:D6) Project A should be adopted as it has higher NPV Cost: $400,000.00 Inflow: $126,000 4 Year Life Span NPV:$17,327.98 Year Project B 0 PV factors@8% (160,000.00) Year 1 (160,000.00) 1 52,800.00 0.925925926 48,888.89 2 52,800.00 0.85733882 45,267.49 3 52,800.00 0.7932241 41,914.34 4 52,800.00 0.735029853 38,809.58 Net Present Value: 0 1 2 3 4 Present value Project B -160000 52800 52800 52800 52800 PV factors@8% =1/((1+8%)^A2) =1/((1+8%)^A3) =1/((1+8%)^A4) =1/((1+8%)^A5) =1/((1+8%)^A6) Net Present Value: 14,880.30 Present value =B2*C2 =B3*C3 =B4*C4 =B5*C5 =B6*C6 SUM(D2:D6) Project B Cost: $160,000.00 Inflow: $52,800.00 4 Year Life ...
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